As investors ponder the business environment after Covid 19, they must ask themselves “what will be rare and valuable?” Two types of businesses that meet these criteria are consistent growers and income producers. Certainly, many others will have some recovery, but not consistent advance potential. There is abundance of so many commodities and services. Companies producing or providing these face brutal competition, perhaps decline, consolidation, or even failure.
Some technology and pharmaceutical companies have very bright futures. There are also small niches in other sectors that provide wonderful opportunity. Innovation, better approaches, efficiency driving solutions, and the totally new will often find markets. These may change sectors or even industries; brains always count! This is how our economy will advance and investors will pay up for these opportunities!
Income sources in a world awash in liquidity are also in short supply. Fixed income instruments (bonds, notes, CD’s, etc.) provide very little. This investment category is directly affected by the central bank policy of keeping interest rates very low. Companies that can continuously pay good dividends are golden. This crisis period will sort those that have the financial stability, ability, and willingness to do so from those that do not. Early investors will grab the stocks of these businesses and receive great returns as well as cash flow.
The Bull and his partners have been actively focusing on finding and including these opportunities for the after-pandemic world. We hope you will too, but if you need help, talk with us. All portfolios need to be reviewed with the new business realities in mind.
Stay steady, my friends.
The Lonely Bull